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Fourth industrial revolution resistance in manufacturing

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South Africa’s manufacturing sector is showing significantly low levels of deployment of fourth industrial revolution (4IR) technologies, as trade unions and worker councils push back against digital transformation in the sector.

This, amid fears that emerging technologies such as artificial intelligence (AI) and machine learning could replace millions of jobs across the globe in manufacturing alone by 2025.

This emerged at the launch of PwC’s “Insights into the Industry 4.0 Readiness of SA Manufacturing 2022” report, during a webinar yesterday. The report also explores the value proposition of 4.0 technologies across various sectors.

PwC conducted in-depth interviews with senior leaders across nine local manufacturing sectors in April and May.

The manufacturing sector is SA’s fourth-largest sector and a key driver of economic growth, contributing 14% to the gross domestic product.

While some leading manufacturers in SA use analytics to their advantage, 16% of respondents reported no use of emerging technologies and said they had not invested in digital transformation initiatives. The majority stated they were still in the early stages of tech adoption.

Speaking during the webinar, Vinesh Maharaj, smart manufacturing leader for PwC in SA, explained: “The low levels of tech adoption are mainly due to resistance by both the workforce and the unions, who are pushing back against the deployment of technology.

“Some of the manufacturing company leaders tell us that every time they engage employees and unions on these [digital transformation] discussions, they get a lot of resistance, to a point where the conversation is abandoned.

“This is very sad because it means they are only looking at a short-term view of this and their competitors will become more efficient as a result of using technology. They don’t realise the actual reason they may lose their job is due to falling behind competitors. So it’s important to get people to understand the benefits on the ground and get the workforce to buy into this process.”

Modern manufacturing has over the past few years become an increasingly technology-driven industry, with manufacturing firms across the globe increasing their investments in technologies such as the internet of things (IOT), AI and machine learning, big data analytics, virtual reality and 3D printing.

Digital transformation in the global manufacturing market was valued at $263.93 billion in 2020 and is expected to reach $767.82 billion by 2026, as manufacturers recognise the role of technology in cost-efficiency and achieving quicker production turnaround times through modernising the entire process.

However, the last few years have seen growing concerns that advances in AI and robotics will wipe out many low- and medium-skilled jobs, while some experts continue to refute these claims.

Progress equals profit

According to Maharaj, other reasons for minimal tech investments in manufacturing include company leaders’ lack of knowledge about the opportunities technology presents in the sector, and SA’s current economic downturn.

“Lack of knowledge means people don’t know what they don’t know. So if they are not familiar with the benefits of IOT, this means they won’t invest in IOT. However if you are educated about it and you can see how it will benefit your business, you will invest.

“The economic downturn has seen some investors not being keen on investing in SA. The load-shedding and all the other challenges in this country further limit investment opportunities in things like technology.”

Despite low investment in the 4IR, PwC found that for the majority of the surveyed manufacturers that are in the early implementation stages, the top three 4IR technologies deployed were condition monitoring (48%), followed by connectivity or industrial IOT (39%) and robotic process automation (29%).

Maharaj emphasised the value of technology in the sector, noting employees who are replaced by technology have the opportunity to be upskilled and potentially get higher paying jobs within the industry, and better benefits and bonuses, etc.

Developing countries such as SA have the potential to exponentially grow their economies and combat various resource-related challenges. The institutionalisation of Industry 4.0 would contribute to the country’s sustainability, as the economy is heavily affected by a lack of proper sustainability measures, notes the research.

“South Africa’s manufacturing sector must embrace and adapt to the uncertainty of 4.0 to fully harness its potential. While new technologies can create new jobs, they can also nullify and replace existing jobs, creating a new-found need to upskill and re-skill employees to ensure they remain relevant in the workplace,” noted Maharaj.

“Overall, manufacturers say they are eager to upskill employees to complete more fulfilling tasks, while being open to the idea of automation and digitisation paving the way in terms of repetitive and laborious tasks.”

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19 Aug
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